ENGLEWOOD, Colo., Nov. 4 /PRNewswire/ -_ Echo Bay Mines Ltd.
(Amex and TSE: ECO) today reported a net loss of $17.7 million ($0.14 per
share) in the third quarter of 1997 before a special one-time restructuring
provision of $309.8 million ($2.22 per share).  The restructuring charge
brought the total quarterly loss to $327.5 million ($2.36 per share).
    A year ago, Echo Bay had a third quarter net loss of $42.4 million ($0.31
per share), including a provision of $30.0 million ($0.22 per share) for waste
rock stabilization at the McCoy/Cove mine in Nevada.
    The restructuring provision is a non-cash charge.  It reduces the cost
basis of the company's assets on the consolidated balance sheet.  It also
reduces the company's future gold production costs by an estimated $20-30 per
ounce of gold produced over the lives of the mines, as it reduces deferred
mining costs and future depreciation and amortization amounts.  There is no
tax effect; the amount is the same pre-tax and after-tax.
    The restructuring provision resulted from a previously reported
comprehensive review of the carrying values of the company's assets, including
four producing gold mines and a portfolio of exploration properties,
development projects and other assets, in light of current market conditions.
As reported, Echo Bay initiated the asset value review in the second quarter
of this year.

    Details of the non-cash charges follow:
    -- $107.4 million write-down of Echo Bay's investment in Santa Elina Mines
Corporation in Brazil to its current market value of $45.0 million.
    -- $50.0 million write-off of Echo Bay's entire investment in the Kingking
copper-gold project in the Philippines.
    -- $127.0 million reduction in the carrying values of three producing
mines in the United States and Canada (McCoy/Cove, Lupin and Kettle River) as
a result of continuing low gold prices.
    -- $25.4 million to write down certain other investments and assets to
market value and to provide for estimated legal and restructuring expenses.

    The company assessed the recoverability of the carrying values of all
assets in light of both short-term and long-term views of the gold price.  A
brief discussion of each carrying value assessment follows.
    Santa Elina Mines Corporation:  The market value of Echo Bay's investment
in this gold exploration and development company in Brazil has dropped
precipitously in the wake of the decline in value of many junior exploration
companies and the plunge in world gold prices to 12-year lows.  The company
wrote down its investment by $107.4 million to Santa Elina's estimated market
value of $45.0 million.
    Kingking:  Echo Bay took a $50.0 million charge to write off its entire
investment in this copper-gold project in the Philippines.  As reported, Echo
Bay and its joint venture partner, TVI Pacific Inc. (TSE: TVI), completed a
feasibility study in April of this year.  The study concluded that Kingking
would not meet the joint venture's desired rates of return, principally due to
the required payment of $67 million in order to exercise the purchase option
(Echo Bay's 75% share, $50.3 million).  The joint venture elected to let the
option expire.
    Share Investments and Other:  This $25.4 million charge includes
$15.6 million to write down Echo Bay's portfolio of share investments in other
companies, reflecting the decline in market value of many gold exploration and
development companies and continued low gold prices, and $9.8 million for
miscellaneous asset write-downs and estimated legal and restructuring
expenses.  The share investments are principally common shares of exploration-
oriented companies acquired by Echo Bay as part of a global strategic-alliance
strategy over a period of years.  Because Echo Bay has sharply refocused its
exploration strategy, most of these share investments now are non-core assets
and will be disposed of.  The miscellaneous asset write-down (mostly leasehold
improvements related to office downsizings and closures) is $2.1 million, and
the accrual for estimated legal and restructuring expenses is $7.7 million.
Echo Bay implemented the final steps of a company-wide downsizing in the third
quarter, reducing Denver corporate office personnel from 116 to 75 and closing
a number of exploration offices around the world.  The company expects a
reduction of approximately $4 million in annual cash operating costs and
general & administrative expenses as a result.
    Three Producing Mines:  As a result of continuing low gold prices, Echo
Bay reduced by a total of $127.0 million the carrying value of three gold
mines -_ McCoy/Cove, Lupin and Kettle River.  The non-cash charge reduces Echo
Bay's consolidated gold production costs by an estimated $20-30 per ounce of
gold produced over the lives of the mines.  Approximately half of the future
cost reduction, $10-15 per ounce of gold produced, is in cash operating costs
(reflecting a $64.2 million reduction in deferred mining costs) and the other
$10-15 reduction in non-cash depreciation and amortization expenses
(reflecting a $62.8 million reduction in ore bodies, plant and equipment).
    Echo Bay noted that the write-down puts its gold mines in a position to
weather a prolonged period of low gold prices.  All four mines continue to
perform well, and further improvements are anticipated.  The Round Mountain
mine approved a new mining plan in the third quarter that increases cash flow
and profitability and reduces cash operating costs.  At McCoy/Cove, additional
mineralization has been discovered just outside the Cove open pit that has the
potential of adding to production and extending mine life.  Lupin has
introduced new mining and blasting methods at depth that make deeper levels
economic, potentially adding 2-3 additional years at current production rates.
At Kettle River, positive exploration results along extensions of two ore
bodies indicate the potential is excellent to add minable ounces and
additional years of mine life in 1998 and beyond.

    Third Quarter Operating Results
    Echo Bay's gold production fell and silver production rose in the third
quarter, as expected, principally reflecting the planned processing of
carbonaceous ores leaner in gold but richer in silver at the McCoy/Cove mine.
Company-wide quarterly gold production totaled 177,502 ounces this year, down
19% from 218,043 ounces last year, as planned.  For the first nine months,
gold production topped 550,000 ounces, in line with the company's full-year
production target of 700-725,000 ounces.  Silver production rose 56% to
3,271,677 ounces from 2,092,987 ounces a year ago, bringing silver production
for the first nine months to 7.6 million ounces _- easily achieving in the
first nine months the company's full-year 1997 production target of seven
million ounces.
    Cash operating costs rose 3% to $251 per ounce of gold produced in the
quarter, principally reflecting the lower gold grades processed at the
McCoy/Cove mine.
    Quarterly results also reflect lower gold prices this year than a year
ago.  The average price realized by Echo Bay fell by $10 per ounce of gold
sold in the quarter, to $380 per ounce this year from $390 a year ago.  Echo
Bay's $380 realized price was $56 better than the $324 average spot price per
ounce of gold on world markets during the quarter, a result of the company's
hedging programs.
    Echo Bay is a major gold producer with mines in Canada and the United
States.  The primary markets for its shares are the American and Toronto stock
exchanges.  Its shares are also listed on stock exchanges in Switzerland,
France, Germany and Belgium.

                                ECHO BAY MINES
              (American and Toronto stock exchanges, symbol ECO)
                               Earnings Summary

    U.S. dollars                     1997                    1996

    THREE MONTHS ENDED SEPT. 30:

    Revenue                   $74,450,000             $94,936,000
    Net loss:
      Before special
       restructuring
       provision            $(17,725,000)           $(42,415,000)
      After special
       restructuring
       provision           $(327,525,000)           $(42,415,000)
    Loss per share:
      Before special
       restructuring
       provision                  $(0.14)                 $(0.31)
      After special
       restructuring provision    $(2.36)                 $(0.31)
    Weighted average
     common shares outstanding139,370,031             137,603,507


    NINE MONTHS ENDED SEPT. 30:

    Revenue                  $224,103,000            $257,772,000
    Net loss:
      Before special
       restructuring
       provision            $(55,218,000)           $(72,174,000)
      After special
       restructuring
       provision           $(365,018,000)           $(72,174,000)
    Loss per share:
      Before special
       restructuring provision    $(0.43)                 $(0.55)
      After special
       restructuring provision    $(2.65)                 $(0.55)
    Weighted average common
     shares outstanding       139,370,031             132,794,837

    "Safe Harbor" Statement under the Private Securities Litigation Reform Act
of 1995:  The statements herein that are not historical facts are forward-
looking statements.  They involve risks and uncertainties that could cause
actual results to differ materially from targeted results.  These risks and
uncertainties include but are not limited to future changes in gold prices,
which could render projects uneconomic; differences in ore grades, recovery
rates, and tons mined from those expected; changes in mining and milling rates
from currently planned rates; the results of future exploration activities and
new exploration opportunities; conclusions of feasibility studies now under
way; changes in project parameters as plans continue to be refined; and other
factors detailed in the company's filings with the Securities and Exchange
Commission.

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